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Profit Margin Calculator

Gross margin, profit and the selling price a target margin needs.

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From cost and price

Gross profit margin

—

Gross profit—
Equivalent markup—
Cost as % of price—

Price for a target margin

Work backwards from the margin you need.

Charge

—

Margin is not markup. Margin divides profit by the selling price; markup divides it by the cost. Pricing at cost plus 40% when you meant a 40% margin leaves you short on every sale.

Net margin after other costs

—Gross margin
—Operating margin
—Net margin

Quick Tool Overview

The Profit Margin Calculator turns a cost and a selling price into gross profit and margin, and works backwards from a target margin to the price you need to charge. Margin and markup are shown together, because confusing them is the most expensive arithmetic error in small business.

What it does
Calculates gross margin, profit and the price a target margin needs
You give it
A cost and a price, or a cost and a target margin
You get back
Profit, margin, markup and the required selling price
Best for
Pricing, quoting, retail buying and product profitability
Calculators Free, unlimited use No sign-up Runs in your browser

About the Profit Margin Calculator

Enter your cost and selling price to get the gross profit and the margin as a percentage of revenue. Work it the other way and enter a target margin to get the price you need to charge, which is the calculation pricing decisions actually require.

Margin and markup are shown together because confusing them is the most expensive arithmetic error in small business. Margin is profit as a share of the selling price; markup is profit as a share of the cost. An item costing 60 and selling for 100 has a 40 percent margin but a 66.7 percent markup. Pricing at cost plus 40 percent when you meant a 40 percent margin leaves you nearly twelve points short on every sale.

Key features of the Profit Margin Calculator

Solves for the price you need

Enter a target margin and get the selling price — the calculation pricing decisions actually require.

Margin and markup side by side

An item costing 60 and selling for 100 has a 40 percent margin but a 66.7 percent markup.

The costly confusion prevented

Pricing at cost plus 40 percent when you meant a 40 percent margin leaves you nearly twelve points short on every sale.

Profit in cash and percent

Both are reported, because a percentage alone does not tell you whether a deal is worth doing.

Works in any currency

The arithmetic is currency-agnostic — enter the numbers you have.

How to use the Profit Margin Calculator

  1. 1

    Enter cost and price

    Type what the item costs you and what you sell it for.

  2. 2

    Read the margin

    Gross profit, margin percentage and the equivalent markup are shown together.

  3. 3

    Solve for a target

    Enter a margin you want to hit and the calculator returns the selling price required.

Frequently asked questions

Margin is profit divided by selling price; markup is profit divided by cost. A 50 percent markup is only a 33.3 percent margin, so the same percentage means very different money.

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